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Zimbabwe cancels funding deal for struggling railways

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Zimbabwe’s plan to turnaround its dilapidated rail network is facing delays.

On Thursday, the government announced that it is canceling a deal to recapitalise the financially struggling state-owned National Railways of Zimbabwe (NRZ), to the tune of $400 million.

That deal was with South African logistics group Transnet and its partner DIDG, a consortium of Zimbabwean investors living abroad.

But a government official said several deadlines to provide proof of funding had been missed and that differences had emerged between consortium partners, leading DIDG to present a funding structure that excluded Transnet.

Once the preferred mode of transport for Zimbabweans, the southern African country’s rail network has mirrored its economic decline.

The Transnet deal was expected to revive NRZ – providing funding for improvements like acquiring and refurbishing wagons and upgrading signaling systems.

DIDG said it had not been informed of the government’s decision. Transnet was not immediately available for comment.

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